The Bangladesh Securities and Exchange Commission has restructured the board of Fareast Finance and Investment Limited by appointing nine independent directors to the board of the fundamentally weak non-bank financial institution.
It was the first time the stock market regulator reformed board of an NBFI, BSEC officials said.
The regulator also decided to run a special audit in the company’s financial statements and other affairs.
On completion of the special audit, the regulator would also appoint an observer to the company.
The BSEC on March 29 issued a letter in this regard to the company. The letter was also forwarded to the Bangladesh Bank, the primary regulator of the NBFI.
The company will not be allowed to sell, mortgage, transfer and dispose of any assets until the reconstitution of the board, the letter said.
The regulator appointed nine persons, including three sponsor shareholders of the company, as directors to the board.
Md Ashraful Moqbui, a former chairman of Sonali Bank Limited, Ihsanul Aziz, former AMD of Social Islami Bank Limited, Sheikh Nazmul Hogue Saikot, editor in chief of Kingsnews24.com, Sajib Hossain, assistant professor at the University of Dhaka, Mosharraf Hossain, director of management consultancy at the University of Dhaka and AKM Shahiduzzaman, senior consultant, were made directors, the BSEC letter said.
The three sponsor shareholders Shamsul Islam Varosha, Khadiza Waheeda Jahan and Rimsha BD Limited (represented by Ashaduzzaan) were made directors of the restructured board, it said.
Ashraful will be the chairman of the board of directors of the company.
The independent directors will not have any personal financial liability.
‘The BSEC observed that Fareast placed in the ‘Z’ category on April 19, 2018 and the shares of the company have been trading under the category for a period of 2 years 11 months,’ the letter said.
‘But, the board of directors of the company did not initiate any action and therefore, failed to improve performance of the company during this period,’ it said.
Moreover, the company and its board of directors have failed to declare dividend since 2017, which is detrimental to the interest of the investors of the company and undesirable to the commission.
The ‘Z’ category company was not reconstituted within 45 working days from the first day of placement of the company in the junk category, violating the BSEC notification issued on September 1, 2020.
As per financial statements for the year ended on December 31, 2019, the company has sustained an accumulated loss of Tk 152.22 crore which includes net loss after tax Tk 71.79 crore for the year.
Midway News Team
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